The EURUSD is about to close out another banner week. It would be the third in a row since the single currency found a bid at 1.0520. And thanks to a more dovish than expected Fed, the pair is trading at its highest level since February 6th.
But despite recent strength, the Euro has yet to make any real headway. The pair continues to trade in a range that has directed price action since December of last year, which brings us to the main (technical) event for next week.
The confluence of resistance in the 1.0800 region looks formidable. The trend line from the December 8th high comes in near 1.0790. And just above that is the 1.0825 handle, a level that dates all the way back to 1999.
The 1.0825 level is also the 38.2% Fibonacci retracement when measuring from the 2016 high at 1.1615 to the current 2017 low at 1.0340.
For these reasons, I’m not interested in buying the Euro while below 1.0825 on a daily closing basis. There is far too much resistance just above current prices to consider a long position.
For now, the jury is still out on whether the EURUSD has carved out a four-month inverse head and shoulders pattern. For that to become a probability rather than a possibility, I’ll need to see a daily close above the 1.0800/25 area.
Otherwise, any bearish price action from this area next week could set the stage for a short setup. Key support from current levels comes in at 1.0712 followed by 1.0635.
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